The European Union has brokered a preliminary agreement on new rules that will increase scrutiny of foreign investments into Europe, a move implicitly aimed at curtailing strategic investment by Chinese entities on the continent, Reuters reports.
The negotiations included representatives from the European Parliament and all 28 member states, and will pave the way for a system where the European Commission would investigate foreign investments in sensitive areas, including strategic technologies and critical infrastructure, such as ports and energy networks.
Speaking of the deal, the parliament’s head negotiator, Franck Proust, said: “It will mark the end of European naivety. All the world powers – the United States, Japan, China – have a method of screening. Only Europe does not.”
Calls for an investment screening process were led by France, Germany and the previous government of Italy, though the country’s new populist government is not keen on the new rules. The states were mainly reacting to a surge of Chinese investment since 2015 into key ports, as well as technology firms in strategic industries.
However, the new system is by no means certain to be implemented at this stage. First, the proposal needs to be approved by the 28 member states at a meeting on December 5. Several countries, including Cyprus, Greece, Luxembourg, Malta and Portugal are believed to be opposed to the policy.
Many of those countries receive large investments from China, such as Greece, whose Piraeus port has thrived thanks to a large influx of capital from China’s COSCO Shipping.